Apple share price: Q1 earnings preview

The Apple share price has seen strong gains as we lead up to the Q1 earnings release. Increased demand for the groups iPhones, services and Mac’s suggests that revenue could exceed $100 billion for the quarter.

When is Apple’s earnings release date?

Apple is expected to release the first quarter (Q1) 2021 results on the 27 January 2021, after (US) market close.

What to expect from the Apple results?

Q1 results for Apple have historically been strong for the group, as new generation iPhone’s see their first full quarter of sales post launch. Q1 2021 is expected to be no different as earnings account for the iPhone 12 Mini, Pro and Pro Max models, which have been in high demand. The iPhone remains the most meaningful contributor to group earnings, although investors and traders will also be looking for strong growth from sales of the M1 (Mac), wearables and group services. These areas of the business are suggested to have seen strong support from an increased digital appetite in the wake of the current pandemic.

The onset of Covid-19 has seen Apple not delivering future forecasts with each new quarterly report, in lieu of the challenges the pandemic has imposed on the global economic workplace. However a consensus of analyst estimates suggest revenue for the quarter (Q1 2021) of $103.01 billion (Q1 2020 revenue $98.1 billion) and earnings per share (EPS) of $1.41 for the period.

How to trade Apple shares into the results

The below two graphics provide traders with both a retail short-term view on the stock, as well as an institutional longer-term view on the company, as to how market participants are positioning themselves on Apple ahead of the results release.

A Thomson Reuters poll of 40 analysts maintain a long-term average rating of buy for Apple (as of 25 January 2021), with 14 of these analysts recommending a strong buy, 15 recommending a buy, nine hold, one sell and one strong sell recommendation on the stock.

From a retail trader perspective (as of 25 January 2021), 93% of IG clients with open positions on the Apple expect the price to rise over the near term, while 7% of IG clients with open positions expect the Amazon price to fall.

Apple earnings: technical analysis

The long-term price trend for Apple remains firmly up. The dotted line shows that in the near term we have seen an acceleration of this uptrend to break the high at 138.90.

However, while the long-term trend for Apple remains up, the short-term move higher has pushed the stock into overbought territory. The overbought signal is not considered a signal to trade against the underlying uptrend but does warn that a pull back or sideways correction could be nearing.

Traders respecting the uptrend in place might hope to use a pullback or sideways correction as an opportunity for long entry should the price move to meet one of the trend lines on our chart. Trendline support is currently considered at levels 130.50 and 125 respectively.

In summary

  • Q1 2021 results are scheduled for market close on the 27 January
  • Revenue for the group is expected to exceed $100 billion for the first time in a quarter
  • Consensus estimates predict EPS of $1.41
  • The long-term average broker rating for Apple remains buy
  • The vast majority of IG clients with open positions on Apple expect the price to rise in the near term
  • The long-term price trend for the Apple share price remains up
  • The share price is overbought in the near term
  • Trend followers might hope for a short-term price pullback before looking for long entry into the stock

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